Analyzing Sun Communities (NYSE:SUI) and Agree Realty (NYSE:ADC)

Sun Communities (NYSE:SUI) and Agree Realty (NYSE:ADC) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Profitability

This table compares Sun Communities and Agree Realty’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sun Communities	7.46%	3.21%	1.40%
Agree Realty	31.62%	3.77%	2.39%

Insider and Institutional Ownership

99.6% of Sun Communities shares are held by institutional investors. Comparatively, 97.8% of Agree Realty shares are held by institutional investors. 1.9% of Sun Communities shares are held by company insiders. Comparatively, 1.8% of Agree Realty shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Sun Communities and Agree Realty, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sun Communities	1	8	5	0	2.29
Agree Realty	1	3	11	1	2.75

Sun Communities currently has a consensus price target of $135.69, indicating a potential upside of 9.87%. Agree Realty has a consensus price target of $78.53, indicating a potential upside of 8.81%. Given Sun Communities’ higher possible upside, equities analysts clearly believe Sun Communities is more favorable than Agree Realty.

Dividends

Sun Communities pays an annual dividend of $3.76 per share and has a dividend yield of 3.0%. Agree Realty pays an annual dividend of $3.04 per share and has a dividend yield of 4.2%. Sun Communities pays out 202.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty pays out 168.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Agree Realty is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Sun Communities and Agree Realty”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sun Communities	$3.22 billion	4.88	-$201.00 million	$1.86	66.40
Agree Realty	$537.49 million	13.90	$169.96 million	$1.81	39.88

Agree Realty has lower revenue, but higher earnings than Sun Communities. Agree Realty is trading at a lower price-to-earnings ratio than Sun Communities, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Sun Communities has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Agree Realty has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500.

Summary

Agree Realty beats Sun Communities on 10 of the 17 factors compared between the two stocks.

About Sun Communities

Established in 1975, Sun Communities, Inc. became a publicly owned corporation in December 1993. The Company is a fully integrated REIT listed on the New York Stock Exchange under the symbol: SUI. As of December 31, 2023, the Company owned, operated, or had an interest in a portfolio of 667 developed MH, RV and Marina properties comprising 179,310 developed sites and approximately 48,030 wet slips and dry storage spaces in the U.S., the UK and Canada.

About Agree Realty

Agree Realty Corporation is a publicly traded real estate investment trust that is RETHINKING RETAIL through the acquisition and development of properties net leased to industry-leading, omni-channel retail tenants. As of December 31, 2023, the Company owned and operated a portfolio of 2,135 properties, located in 49 states and containing approximately 44.2 million square feet of gross leasable area. The Company's common stock is listed on the New York Stock Exchange under the symbol "ADC".